“Despite the recent pullback on the LME, we haven’t seen too much more activity. It’s still really quiet,” one supplier source told Metal Bulletin sister publication AMM.

“The recent [LME] drop has spurred a little bit of activity, but people are still hesitant,” a second supplier source said.

The LME’s three-month zinc contract closed the official session on October 14 at $2,246 per tonne ($1.02 per lb), down 5.6% from $2,380 per tonne ($1.08 per lb) on September 30 but still 53.1% above this year's low of $1,467 per tonne (66.5 cents per lb) in January.

Many market participants said the premium is still too high to spur demand from consumers.

“I feel like anytime [LME zinc is] over a buck, designers get away [from it]. They think they can get other materials that work. When it’s over a buck, it just seems to be taboo for the industry to buy,” the first supplier source said.

“Buyers are keeping away because of the price. They’ll wait as long as they can,” a third supplier source said.

Market participants also noted that while there’s currently plenty of material in the market, premiums could be pushed upward as supply begins to tighten.

“Freedom of material is probably keeping premiums down. Premiums and prices will start to rise maybe in the first or second quarter of next year as the concentrate situation starts to get tighter,” the third source said.

New York-based Goldman Sachs Group Inc analysts have forecast that zinc prices will rise alongside diminishing supply of the material.

While the high price has caused Zurich-based Nyrstar NV to restart its middle Tennessee mining operations and is driving Vancouver, British Columbia-based Teck Resources Ltd to double zinc output at its Antamina Mine in Peru starting next year, market participants are unsure if the metal has reached a level that would trigger Baar, Switzerland-based Glencore Plc to restart its zinc mines.

“I feel like now [Glencore is] late to the party. Are they still going to wait on the sidelines? I don’t know. It’s still yet to be determined,” the third source said.

While market participants indicated that contract negotiations for 2017 tonnages are still slow to start, a fourth supplier source said he had heard numbers of around 8 cents per lb for contract premiums.

“Contracts are probably late this year,” the third source said. “A lot of people will discuss it at LME Week. After LME Week, and in the first quarter, we’ll hear more about the agreements.”